WHAT IS A COOPERATIVE?

The saying goes, "to get different results, you have to do different things." And, the same is true in the business world. Inequality is growing and the position of workers in the globalized, high-tech economy is becoming more and more precarious. We can think of concerns related to the well-being and protection of workers in the sharing economy or, big corporations that make decisions with the sole intention of maximizing profits without regard to the environment. We have to think differently if we want different results, and a cooperative is a different kind of company.

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Cooperatives can generally be divided into 4 camps. Most commonly, a worker-owned cooperative may come to mind. These are businesses such as daycares, grocery stores, and manufacturing plants where the employees working in the company are the owners and make decisions about the company. One of the most famous examples is the Mondragon corporation based in the Basque region of Spain, employing over 70,000 worker owners. There are other types of cooperatives, however, and these include consumer cooperatives, producer cooperatives, and purchasing cooperatives.

When the people buying the goods or services of the company are its owners, it is known as a consumer cooperative. These are businesses owned by the people who use them that can help gain more competitive prices for the consumer and to fill a community need not currently being met. Consumer-owned cooperatives can, and have historically, provided services such as housing, healthcare, and utilities to their owners. Another type of cooperative, the producer cooperative, involves people cooperating to manufacture and market goods. This type of cooperative can lead to a more advantageous market position for smaller businesses competing nationally with larger companies. Lastly, a purchasing cooperative is a collaboration among buyers to enhance purchasing power. These cooperatives aggregate buying power to get lower prices for products.  

Cooperatives are unique because they operate on a collective model. They are characterized by democratic control. The International Cooperative Alliance defines a cooperative as, “an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise." They are different because the intention of the business is not just about profit, it is about the people who own them. So in 2016, I encourage you to start thinking about how you could make money differently or, how your community could look different if you and your neighbors owned the businesses in it.